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Buying a home is a learning process. First time homebuyers may have been eyeballing the real estate for sale pages of your local paper for a long time and be very familiar with the going prices in a particular neighborhood. The prices you see in the listings are what the real estate agents and seller's feel is "market value" for the property. Market value is what buyers are willing to pay for a particular property. However, market value is not what your mortgage lender will look at when determining a property's value. During the mortgage approval process, your lender will order a real estate appraisal. A third-party appraiser will evaluate the home based on a variety of factors, including a comparison of the home to other homes that have sold in the immediate neighborhood over the past few months. Diligent appraisers may conduct a physical inspection the property and will take current trends into consideration when calculating the appraised value. However, if the appraiser is not familiar with the neighborhood and current real estate value trends, it is possible that the appraised value will come in lower than it should. This could mean the difference between your mortgage application being approved or denied. To learn more about real estate appraisals, visit Bankrate.com's Web site, which is loaded with tons of useful information for both home owners and buyers.
|Jennifer Mathes, Ph.D.|